The Reserve Bank of India (RBI) has mandated new reporting guidelines for gold derivatives transactions to enhance transparency, regulatory oversight, and data completeness. These guidelines apply to transactions undertaken by banks and their customers/constituents under the frameworks of RBI regulations on forward contracts, the Gold Monetization Scheme, risk management, and hedging of commodity price risks. The move is expected to foster a secure and well-regulated derivatives market.
Scope and Effective Date:
The guidelines cover over-the-counter (OTC) gold derivatives transactions conducted by banks and eligible customers in domestic markets, International Financial Services Centres (IFSCs), and international markets. The reporting requirements will take effect on February 1, 2025.
Mandatory Reporting Requirements:
Banks must report all OTC gold derivatives transactions to the Clearing Corporation of India Ltd. (CCIL) trade repository by 12:00 noon on the next business day. Additionally, amendments or unwinding of these transactions must also be reported to the CCIL. Reporting formats will adhere to a structure approved by the RBI and coordinated with CCIL.
One-Time Reporting:
To ensure comprehensive data coverage, banks must report all matured and outstanding OTC gold derivatives transactions undertaken from April 15, 2024, to the CCIL trade repository by February 28, 2025. This includes transactions by eligible customers in domestic markets and IFSCs.
Quarterly Reporting Obligations:
Banks are required to submit quarterly reports on gold derivatives transactions conducted on exchanges in IFSCs and overseas by themselves and their eligible customers. The first report, covering the quarter ending December 31, 2024, must be submitted within ten days of the succeeding quarter.
Regulatory Framework:
These directives are issued under the RBI Act, 1934, the Foreign Exchange Management Act, 1999, and the Banking Regulation Act, 1949. They supplement existing regulatory requirements and ensure adherence to all applicable laws.
Implications:
The initiative underscores RBI’s commitment to strengthening the digital reporting ecosystem for gold derivatives. By ensuring standardized and timely reporting, the guidelines aim to improve market transparency and regulatory compliance, benefiting banks, customers, and the overall financial ecosystem. These measures are expected to bolster trust and efficiency in the gold derivatives market.
